So you’ve decided this value partner thing is a good idea. Either you’ve found a business you’d like to work with or are looking for one. You want to get the ball rolling but who should you choose? And what value can the relationship bring?
Getting a quick answer to the value question is important for two reasons:
- Shaping an effective value partner strategy becomes a whole lot easier
- You can quickly decide what direction, if any, partner discussions should take.
Because of this, we’re constantly looking to refine our approach to that inevitable question; What’s in it for us? We happen to have a few different approaches and each looks at the problem in a slightly different way but ultimately, they end up with similar results.
Recently we came up with the value partner matrix. The goal is to quickly sort your partner ecosystem into buckets, identifying and unlocking the opportunities within.
The model is this: businesses create value by providing products (and services) into markets. If you’re engaging a partner to increase that value, then you are ultimately looking to drive value from some combination of the same or new products into the same or new markets.
The result is a simple 2×2 matrix like so:
Each quadrant represents a value discussion you and your value partners can bring. You can also start to visualise your partner relationships by plotting them in each quadrant. Before we get too fancy, let’s start by breaking down the quadrants in a little more detail.
Same Market, Same Product: If you’re in this quadrant, then you probably have a supply and demand problem. There are some creative options here like group buy procurement with your partners (and even competitors). The more straight forward relationships though are pure supply chain partners on either side of the supply : delivery divide.
Same Market, New Product / New Market, Same Product: These two quadrants are really opposite sides of the same coin. You are basically trading product or IP with market presence. The simple supply chain choice most people think of here is product reseller relationships. The more innovative options include things like product bundling or other product enhancements; That is repackaging products for greater value to the consumer.
New Product, New Market: For us, this is where the magic can happen. You and your value partner are collaborating and innovating together to create whole new opportunities that wouldn’t otherwise exist. Why is it special? Because this is the only quadrant you are truly creating new value rather than “Sweating out” existing opportunities.
I would suggest partner opportunities in the last quadrant are rare but potentially the most fruitful. We are geared as humans to look at objects, products, and services in how they are typically used. Breaking past that ceiling requires a special kind of thinking. Do it successfully though, and your opportunities for growth can become step wise, rather than incremental.
Either way, have a think about where you, your value partners, and prospective value partners sit in each bucket. What is the value that each of you will be bringing to the party? Are there areas you are under (or over) represented? Are you letting new opportunities go wanting? Do your potential partners fit on the matrix at all?
More over, let us know how you go. Hopefully the matrix will provide you with the quick answers you need before taking that next step. Making it easier to make targeted and deliberate choices for your partner ecosystem.